Feds use big stick on local content

LARGE resources companies will have to move to increase transparency on local content or risk losing a 5% tariff concession on imported goods.

Feds use big stick on local content

Under a plan announced yesterday by Prime Minister Julia Gillard at a one-day jobs forum held in Canberra, proponents of projects worth more than $2 billion will have to publish on a public website a comprehensive list of their requirements for contracts.

The government will monitor the scheme and regularly ask companies about their efforts to source goods from local suppliers.

If the government is unsatisfied with the efforts made, it could take away the 5% tariff concession companies currently receive.

While union and manufacturing groups hailed the news and opposition leader Tony Abbott appeared to support the idea in principle, the Minerals Council said resource companies already bought a lot of local goods and services.

The West Australian quoted Gillard as saying: "If you want Australian taxpayer dollars, then you're going to have to give Australian businesses a fair chance to compete for work."

Union and manufacturing chiefs said the plan would save jobs.

"It fits exactly with what we've been arguing for, that we want to maximise the benefits of this mining boom," Australian Manufacturing Workers Union national secretary Dave Oliver said.

The Australian Worker's Union has been campaigning for more local content on large resources project, taking aim at Woodside Petroleum in August for sourcing most of the steel for its Pluto LNG project from overseas when the ore used for the steel was more often than not dug up in Australia.

"The great myth peddled by many of the players in the resource industry is that somehow Australian content is prohibitively expensive," AWU president Paul Howes was quoted by the West Australian as saying.

"It's not. We're digging it up, shipping it away and bringing it back at sometimes four times the price."

A Woodside Petroleum spokesperson reportedly told the paper that it did not source the steel from Australia simply because local suppliers could not provide the entire 50,000 tonnes of steel needed for the project.


A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.

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